Jade Art Group Inc (JADA)

[value1008]

Sahd3g (Randy), et al.

Controller got back to me on the figures that would apply if JADA were only selling 3k or 4k tons of jade each quarter (and he corrected my math--i'd used a wrong figure and got 72% as a net profit margin when of course net margins aren't that high). Anyway, here's what Controller wrote to me on Yahoo:

"The After tax number would not be that high at 3,000 or 4,000 tons sold. [...] You have fixed costs in the Amortization and the SG&A of roughtly $1.2M - to $1.3M per quarter.

"From the spreadsheet I have if you sold 3,000 tons EPS would be about $.088 and at 4,000 tons it would be $.122. Both assume a 27% tax rate used in Q3.

"Even at 9,000 tons per quarter the after tax imcome I had put in the original post was 65% of sales.

"One thing I want to point out is the volume. I work in the high tech industry and in Q1 2009 we laid off 40% of our China direct labor employees because sales were so low. Q3 revenue although much better than Q2 was still way lower than our Q4 revenue numbers. And Q1 numbers are even higher. Plus we have now gotten back to the employee level we were at prior to Q1 2009.

"This is why in my OWN opinion, sales in Q4 will be around 4,000 - 5,000 tons and I truly believe we will get 6,000 - 7,000 tons in Q1.

"Again that is only my opinion based on the growth of the economy (I could go into a whole new post on why if the economy grew by 12% in China, luxury items grew by a multiple of that). [...]"